The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.

A dynamic offset policy has to include a mechanism for identifying the causes for likely delay or default on the part of vendors in discharging their obligation and removing the impediments faced by them

The 5th August amendment to the offset guidelines exemplifies how difficult it is to let go of unnecessary controls.

Policymakers need to ask themselves ‘What Really Makes Offsets Tick?’ in order to develop an objective framework based on sound principles repeatedly noticed in the offset regulations of ‘The Smarter Lot’ of countries and in the process avoid committing the seven ‘original sins’ that a poorly-designed offset policy may entail.

The Guidelines of 2012 have been under review for some time. While a drastic shift in the policy is unlikely, some changes in the policy, clarity about some of the existing provisions and simplification of the procedure seem necessary to make the policy work better.